Court of Appeal success for BLP acting for Tindall in dispute with Hilton Group

The Court of Appeal has today, 5 September 2014, ruled in favour of Tindall Cobham 1 Limited and others, the landlords of a portfolio of hotel leases let to Hilton group companies, including the London Kensington Hilton.

The judgment followed a High Court decision that Hilton had breached the terms of the leases, having assigned them to newly incorporated group companies without obtaining landlord’s consent and releasing the original Hilton companies and their guarantor, Hilton Worldwide Inc, from their covenants under the leases.

The Court of Appeal construed the covenants in the leases to balance the interests of the landlord and tenant. It held that the Hilton group is not able to assign the leases intra-group without obtaining landlord’s consent.

International law firm BLP acted for the landlords, and BLP Real Estate Disputes Partner, Roger Cohen, said: “The Court of Appeal judgment provides helpful guidance on how the courts will manage the tensions between landlords and tenants when intra-group assignments are required. It is an important decision for parties who have entered into leases where the covenant of a guarantor is critical to the deal.”